Until recently, Downtown-based Highmark -- Western Pennsylvania's dominant insurer -- reimbursed patients, doctors and hospitals, rather than what the insurer calls independent diagnostic testing facilities. The arrangement often created a collections nightmare for local companies, which could wind up waiting months and years before receiving payment.

Cardiac Telecom Corp., an 11-year-old Greensburg-based firm that monitors irregular heart rhythms for patients at home, was the first of its kind to become part of Highmark's provider network. CEO Lee Ehrlichman received confirmation from Highmark in early December.

"It's unbelievable," Ehrlichman said. "It's huge."

The shift at Highmark means Cardiac Telecom and similar companies may now get paid directly, eliminating collection delays and other problems that can occur when patients or doctors receive the funds. Faster access to revenue is important for biotech and life sciences firms seeking to gain traction in the marketplace.

Applications for a handful of other companies are pending, according to Highmark spokesman Michael Weinstein.

Weinstein downplayed the significance of Highmark's decision, calling the shift in payment practices "business as usual, which reflects changes that are taking place in the marketplace."

Applications for payment for such facilities will continue to be considered on a case-by-case basis, he said, and diagnostic facilities still have to meet Highmark's credentialing requirements.

"It's not a big thing from our standpoint," Weinstein said. "We've been paying for these services for several years."

But local companies and investors hailed Highmark's decision as a breakthrough because reimbursement will arrive more quickly under the new setup.

Payment is especially cumbersome for those companies whose clients span the country. Blue Cross carriers in other regions refer cases to Highmark for payment, but the process can take months. Ehrlichman said he had just received reimbursement paperwork on Dec. 8 that originated in March 2005.

Precision Therapeutics Inc., a South Side-based developer of diagnostic tests used to determine the most effective type of chemotherapy treatment for cancer patients, is not yet in discussions with Highmark about being part of its provider network, said Precision CEO Sean McDonald, but he's hopeful it will be.

"Highmark historically has been conservative," McDonald said. "The active support of Highmark is critical for the development of the life sciences sector in the Pittsburgh area. This region has a tremendous amount of medical technology and has not always developed businesses at the pace of other regions."

Because of its size, Highmark sets the example for other insurers that bioscience companies bill, McDonald said.

"Nationally, it's a huge thing: Highmark is an opinion leader, so their support of technology companies is something that people pay attention to," McDonald said.

Highmark's move carries other clout and may open other doors for fledgling companies, added Joel Adams, general partner and founder of Adams Capital Management, a Sewickley-based venture capital firm that manages capital of $700 million.

"Highmark is a name that's known and respected, and that will make a big difference when companies go to other insurance providers," he said. "Being part of its network will give companies credibility and may help them attract employees from outside the region. So it's not to be minimized."

Business development officials also praised the change.

Pittsburgh Life Sciences Greenhouse CEO John Manzetti called Highmark's new policy "a plus" for the region.

"This may start a trend that could be very good for the (life sciences) industry here," Manzetti said.